Oregon s Renewable Portfolio Standard. December 5, 2014 Julie Peacock, Energy Policy Analyst Oregon Department of Energy

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1 Oregon s Renewable Portfolio Standard December 5, 2014 Julie Peacock, Energy Policy Analyst Oregon Department of Energy

2 Oregon s Renewable Portfolio Standard The Oregon Legislature enacted the RPS in 2007 (SB 838). Under the law, Oregon utilities must deliver a percentage of their electricity from eligible renewable resources by 2025, with interim standards for large utilities. The goal is to stimulate development of new renewable resources. Energy facilities developed before January 1995 are not eligible.* *Certain older biomass & municipal solid waste facilities qualify after

3 Oregon s Renewable Portfolio Standard An Oregon utility may comply with the RPS using any or a combination of the following options: Build an eligible facility, or continue to operate an existing one, and use the power and associated renewable energy certificates (also called credits). Buy power and associated certificates from an eligible facility owned by another party. Buy unbundled renewable energy certificates without underlying electricity. Statute limits how much of the utility s obligation may be met with unbundled certificates. Make alternative compliance payments, with an option to use these funds for energy efficiency or to build an eligible facility in the future.

4 Utility Requirements RPS Class Share of State Sales Affected Utilities and Electricity Service Suppliers Standard by Year Large Utilities > 3% Eugene Water & Electric Pacific Power Portland General Electric 5% 15% 20% 25% Smaller Utilities < 3% but > 1.5% Central Lincoln PUD McMinnville Water & Light Umatilla Electric Coop Springfield Utility Board Clatskanie PUD No Interim Obligations 10% Smallest Utilities < 1.5% Other consumer-owned utilities and Idaho Power No Interim Obligations 5% Electricity Service Suppliers Any All Aggregate obligation, as if each of the customers served by ESS were served by the customer s distribution utility 4

5 Flexibility Mechanisms Cost Limitation A utility is not required to comply with the RPS in a given year if the incremental cost to do so exceeds 4% of its annual revenue requirement. 469A.100 (1) Alternative Compliance Payments Utilities may use alternative compliance payments to meet RPS requirements in any year. 469A.180 (3) Unlimited Banking of Renewable Energy Certificates Utilities can bank renewable energy credits for compliance in future years. 469A.140 (2) Unbundled Certificates Large utilities can use unbundled credits, without acquiring associated electricity, to meet up to 20% of RPS requirements in any year. Before 2020, a large consumerowned utility can use 50% unbundled credits. There is no limit on the amount small utilities and ESSs can use. 469A.145 (1) and Sec. 17a Delayed Requirements for Utilities That Grow Small utilities whose loads grow to >3% of statewide load after 2007 have an extended timeline to meet the standard. 469A.052(2) 5

6 Wind Solar photovoltaic and solar thermal Wave, tidal and ocean thermal Geothermal Biomass Not treated with chemical preservatives Hydroelectric Municipal Solid Waste Hydrogen Gas Eligible Resources Yes Yes Yes Yes Organic human or animal waste Spent pulping liquor Forest or rangeland woody debris from harvesting or thinning conducted to improve forest or rangeland ecological health and to reduce wildfire risk Wood material from hardwood timber grown on land described in ORS (3) Agricultural residues Dedicated energy crops Landfill gas or biogas produced from organic matter, waste water, anaerobic digesters or municipal solid waste Facilities constructed after Jan. 1, 1995, located outside of protected areas Electricity attributable to an efficiency upgrade Certified by Low Impact Hydropower Institute Yes Anhydrous ammonia used as a fuel source at the hydrogen power station

7 Hydroelectricity Hydroelectric efficiency upgrades made after Jan. 1, For BPA facilities, the portion that is attributable to Oregon s share of the electricity generation may be used for RPS compliance. Low-impact hydroelectric projects certified by the Low-Impact Hydropower Institute. Each year a utility can use up to 50 amw of generation from certified facilities owned by Oregon utilities, plus 40 amw from certified facilities located in Oregon and owned by others (total of 90 amw or 788,400 MWh). New hydroelectric projects operational after Jan. 1, 1995, and located outside protected areas designated by the Northwest Power and Conservation Council as of July 23, 1999, or any area protected under the federal Wild and Scenic Rivers Act or the Oregon Scenic Waterways Act. 7

8 Oregon RPS-Certified Facilities Full list at 8

9 Legislative Changes to the RPS HB 3039 (2009) Required Oregon s investor-owned utilities to meet a portion of the RPS with solar PV systems in Oregon and receive two times the credit. HB 3633 (2010) Amended the goal that 8% of Oregon load be met with community renewable energy facilities to emphasize the importance of marine renewable energy sources. HB 3649 (2010) Allowed up to 40 amw of non-utility owned hydroelectric generation facilities built before 1995 to qualify, if the facilities are certified as low-impact hydropower and located in Oregon. 9

10 Legislative Changes to the RPS HB 3674 (2010) Allowed energy from Oregon biomass and municipal solid waste facilities built before 1995 to qualify, if facilities registered with WREGIS by 1/2011. Credits generated from these biomass facilities can be used for compliance beginning Up to 11 amw/year from pre-1995 municipal waste facilities can be used for compliance beginning HB 3691 (2010) Included above-market costs as one of several RPS costs that utilities can recover through rates. HB 3571 (2011) Assigned ownership of renewable energy credits to PURPA Qualified Facilities for contracts in effect before Nov. 30, 2005, unless otherwise expressly transferred. HB 2622 (2011) Allowed any facility which used coal as a fuel source, ends use of coal, and switches to a renewable source after 2011 as a new facility eligible for the RPS. 10

11 Consumer-Owned Utilities Consumer-owned utilities provide RPS compliance reports to their members or customers. Bonneville Power Administration is in the process of registering efficiency upgrades at three facilities. Grand Coulee dam is already certified as Oregon eligible. BPA has analyzed how many Oregon-eligible renewable energy credits the efficiency upgrades from Grand Coulee, Bonneville dam, and Cougar could generate for Tier 1 customer utilities. 11

12 Investor Owned Utilities Must submit their compliance reports to the Public Utility Commission June 1 of every year beginning in 2012 PacifiCorp's 2012 Proposed RPS Compliance Resource Mix Hydropower (Efficency) 4% Geothermal 2% Hydropower Efficency 3.93% PGE's 2012 Proposed RPS Compliance Resource Mix New Hydropower 15.67% Geothermal 0.05% Wind 31.49% Wind 94% Low-Impact Hydropower 48.87%

13 HB 4126 Extends the glide path and amount of unbundled RECs a consumer owned utility can use when it transitions from a small utility to a large utility under the RPS 5% qualifying electricity - 100% unbundled RECs 15% and 20% qualifying electricity - 75% unbundled RECs 25% qualifying electricity - 20% unbundled RECs (business as usual) Requires OPUC to study impacts of electric utilities offering voluntary, bundled renewable energy tariffs to nonresidential customers and allows OPUC to approve tariffs. All costs and benefits associated with the tariffs are borne by the customer receiving service 13

14 Voluntary Renewable Energy Tariff Currently in the study phase and final comments are due Dec. 5 Developing different models of VRETs to include in the study, including utilities to offer a bundled RE product Study will be presented to the Commission who then will decide whether or not a VRET product could be offered by the utilities

15 Questions? Contact: Julie Peacock